Gold Fundamentals Terrific, Set to Blow Through Previous High

After gold’s flat performance in 2022, well-known mining sector entrepreneur Ross Beaty has a better outlook for 2023.

“Quite frankly, I think there’s so much momentum right now — I’m very confident gold’s going to blow through its previous high and sail into new territory, probably this year,” he said at the Vancouver Resource Investment Conference (VRIC).

In Beaty’s view, it was the US dollar’s strength that killed gold’s momentum last year. But even he had trouble reconciling the yellow metal’s lack of momentum with the sheer number of seemingly positive price drivers.

“I was thinking here we have this insane amount of stimulus and money printing … we have runaway reckless spending by governments all over the world, we have high inflation … all of these things should be good for gold,” he said, adding that the Russia-Ukraine war and tensions between China and Taiwan should also have worked in gold’s favor.

Ultimately the US Federal Reserve moved from tightening to reducing its interest rate increases, which weakened the dollar and caused an “instantaneous reaction” from gold, as well as the bond market.

“Gold’s had this glorious run from when that started, which was the beginning of November. (As of) today it’s up US$300, it’s wonderful,” said Beaty. “For me it’s reaffirming the reasons that I’m bullish on gold, which I was really challenging last fall.”

He sees a major disconnect between metals prices and the valuations of junior miners, noting that because investors have largely ignored these companies they have immense room to run.

“The juniors have hardly moved, and so that’s the sector that’s going to see I think the biggest beta in 2023 — and it could be explosive,” said Beaty. “It could really be a fun market this year for equity investors in these juniors that have been so beaten up, that have delivered such terrible returns in the last few years to the poor suffering investors who got into them.”

Watch the interview above for more from Beaty on gold, silver and Equinox Gold (TSX:EQX,NYSEAMERICAN:EQX). You can also click here for the Investing News Network’s full VRIC playlist on YouTube.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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